Professional Services Bill by the Hour But Can't Track It

01 /The Concept

Manufacturing companies know their production costs down to the cent – because they know exactly how long each step takes, whether performed by a robot or a person on the line.

Professional services firms – accounting, law, consulting – still haven't achieved that same precision in tracking how their people spend time. Which is ironic, since they bill clients based on hours worked. The measurement is imprecise even though employees spend meaningful time writing time reports.

You can't manage what you can't measure. Imprecise time tracking leads to imprecise decisions, and optimization gets applied in the wrong places.

Laurel built an AI platform that dramatically improves time tracking and analysis for professional services firms.

Its AI engine monitors what employees do on their computers and online – who they're emailing and why, who they're meeting with and what it's about, which documents they're creating and reading. It cross-references this activity against the client list and automatically determines which client or project the time should be attributed to.

The automatically generated log is editable when the AI makes a mistake. The system also detects gaps in coverage – time periods where no digital activity was logged – and prompts employees to fill those in manually, on the assumption they were handling client matters offline.

Based on completed logs, the AI generates client-ready reports: activity grouped by type and category, descriptions of completed tasks, time costs calculated at the appropriate billing rate for each client.

With Laurel, employees spend roughly five minutes a day reviewing and verifying their time logs. The side effect: an average of 28 additional billable minutes per employee per day start showing up in reports.

Management gets a separate view – who billed what, and how long it took – disaggregated by employee and by level of seniority. A separate layer of reports tracks which tools and services employees actually used during those hours, making it possible to evaluate the ROI of software spend and – separately – to track AI tool adoption: which ones are being used, how frequently, and what time and cost savings they're actually generating.

The company estimates that more complete time tracking yields an immediate 4–11% improvement in firm profitability. The AI captures roughly three times as many activity entries as a human would record manually.

Laurel existed as far back as 2016 under the name Time by Ping, but its real story began in 2022 when the founders got early access to ChatGPT. They used it to build an entirely different platform, relaunched under the Laurel name with $36.5M in funding.

Since then, the platform has signed more than 100 enterprise clients and grown revenue from zero to $26M. Over the past twelve months alone, ARR grew fourfold. Against that backdrop, Laurel recently raised $100M in new funding, pushing its valuation to $510M – with just 59 employees on staff.

02 /Why It Matters

Over the next five years, the "knowledge economy" – professional intellectual services firms of all kinds – is expected to spend more than $1 trillion on AI adoption.

Laurel has positioned itself to capture part of that spend from two angles simultaneously: by embedding its AI time-tracking platform into firms where billable hours are the core business model, and by using that same platform to help those firms measure the ROI of every other AI tool they’re deploying. That second angle is particularly interesting, because a wave of startups is attacking exactly that problem.

Recently covered here: r.Potential ([related review](/review/teper-budet-odin-direktor-vmesto-dvuh)), which is preparing to launch a similar platform and has already raised $5.5M in initial funding.

Workhelix ([covered here](/review/jeto-ne-gemorroj-a-vozmozhnost-eshhjo-bolshe-zarabotat)) launched a comparable platform last spring, raising $15.3M immediately and following up with another $15M in new funding in late February.

Tackle ([reviewed here](/review/perejdi-v-rezhim-osnovatelja)), a Y Combinator grad, launched an AI time-tracking tool for startup founders and executives last fall. Checking its site today, they've begun pivoting toward tracking time for agency and professional services employees – though it's still framed as one use case among several.

Rize ([covered here](/review/mnogo-ili-jeffektivno)) launched an AI personal productivity tracker at the start of last year that monitored how people spend time at their computers. Its site now also describes a professional services time-tracking use case.

What Laurel did differently: it never got distracted by the personal productivity angle. It went straight to enterprise from day one – and not to generic enterprise, but to three specific, enormous markets: accounting firms first, then law firms, then consulting.

While Tackle and Rize spent time building personal trackers and gradually pivoting toward business use without a clear vertical focus, Laurel was already at $26M in revenue, $135M in total funding, and a $510M valuation.

Adjacent to the same efficiency wave, AI tools for reducing meeting bloat – another chronic time drain at knowledge-work firms – have also begun drawing early investor interest.

03 /Opportunities

The general lesson from Laurel’s trajectory is about choosing where to apply a technology. Many founders default to B2C, apparently because the audience is larger. But the size of the audience matters less than the money in the audience. B2B, especially in a large, well-defined vertical, is often far more lucrative.

The contrast between Laurel and its competitors makes this vivid. While Tackle and Rize were building personal time trackers and drifting toward business use without committing to a vertical, Laurel chose three large, specific markets and pursued them sequentially. The result: $26M in revenue, $135M in cumulative funding, and a $510M valuation in roughly the same time frame.

The more specific lesson: those three markets aren’t just large, they’re enormous. Building a Laurel-equivalent for accounting, law, or consulting firms still leaves plenty of room to win a meaningful slice of a massive market.